Lets talk first about Employee Retention Credit If I Got Ppp :
Our group here what do these guys doing everyone in this room is assisting teach people about ERC and uh constantly supply a gorgeous breakfast and have people really learn more about the program we ought to head to the room where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I imply you know if you simply begin to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I mean think of how many real customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you know when you
receive this you know the check is opted for sure which’s when they pay so they do not pay anything up until they actually receive the money they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the method they deposit it into their savings account and they can genuinely rely on Wonder trust that the process has actually been completed and the number of you believe you’ve processed considering that you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you require you need professionals on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the employee retention credit which most of you have actually never ever heard of I certainly hadn’t become aware of it till very recently and learned a lot about it due to the fact that this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have employees between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call up your bank supervisor and say give me a loan it does not work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund okay go on sorry I just need to make certain we got that point I mean that’s a huge distinction a loan versus cash cash I like money cash that’s what we’re speaking about okay and the other loans are done so we’re sitting here in 2023 and the eidl is over the PPP is over and the only one left from the initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get real cash from the internal revenue service all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee retention credit that person had to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have owned a service however it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 workers and you paid federal payroll taxes that’s why you would be qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to an optimum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus because the chaos of the pandemic so they wanted to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of money it is now there’s a caution here the PPP cash would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge clearly now the huge concern is why does no one understand about this since look when I initially heard about this when I initially fulfilled Josh you know I’ve got great deals of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make lots of many financial investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I do not believe it since I utilize the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them wisely to stay alive throughout the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even called to my politician pals Guv Senators they didn’t understand about it I indicate that’s how you know that’s how false information is that there’s no information out there then a lot of people informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one know about the employee retention credit you understand what’s fascinating you’re discussing the banks Kevin since in the PPP loan process the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was mayhem due to the fact that remember in the original cares act you might not do both programs so if you had done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not truly he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never done this before unless you have an account that went into this service and bottom line my company Kevin has been in business since 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our huge big business customers have dealt with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Since of COVID-19 or whose gross receipts, company whose company is totally or partially suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The definition of certifying earnings varies by whether a company had, on average, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing assistance normally provide know-how and assistance to help companies navigate the complex process of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit If I Got Ppp
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based on aspects such as your industry, profits, and operations. If you satisfy the requirements for the credit and determine the maximum credit amount you can claim, they can assist figure out.
Paperwork and Calculation: ERC filing services will help in collecting the required documents, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based on eligible wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the essential kinds and paperwork on your behalf. This consists of finishing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have progressed over time. These companies remain upgraded with the current modifications and make sure that your filings adhere to the most existing standards. If the Internal revenue service demands extra info or performs an audit associated to your ERC claim, they can likewise provide continuous assistance.
It is necessary to research and veterinarian any company offering ERC filing help to ensure their trustworthiness and competence. Search for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax specialists who offer ERC submitting support.
Bear in mind that while these business can offer valuable assistance, it’s always an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage services to retain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, employers should meet one of two criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As discussed earlier, for 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of certified wages paid to employees, consisting of specific health insurance expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they received a PPP loan. Nevertheless, the same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, allowing eligible companies to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, generally Form 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the company.
It’s important to note that the ERC arrangements and eligibility criteria have evolved in time. The best strategy is to speak with a tax expert or go to the official internal revenue service site for the most comprehensive and current information concerning the ERC, consisting of any current legislative modifications or updates.
To get approved for the ERC, a business should satisfy one of the following requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and businesses that got a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC involves completing the required kinds and including the credit on your employment income tax return (typically Kind 941). The exact time it takes to process the credit can differ based on several factors, consisting of the complexity of your business and the work of the IRS. It’s advised to consult with a tax professional for guidance particular to your circumstance.
There are numerous business that can help with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and call these companies straight to inquire about their services and costs.
Please keep in mind that the info provided here is based upon general understanding and might not reflect the most current updates or changes to the ERC. It is very important to speak with a tax professional or visit the official IRS website for the most precise and current details concerning eligibility, declaring procedures, and readily available support.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on earnings paid to all workers whether they in fact worked or not. To put it simply, even if the.
employees worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed just for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just cash payments but also a portion of the cost of company.
provided healthcare. Employee Retention Credit If I Got Ppp
Employers can be right away reimbursed for the credit by decreasing the quantity of payroll taxes they.